CME Group Inc. will expand by concentrating on futures and over-the-counter derivatives, “doing what we do well,” Chief Executive Officer Craig Donohue said.
The announced $9.5 billion takeover bid by Deutsche Boerse AG of NYSE Euronext that would create the world’s largest exchange operator has led to speculation of other potential mergers, including between CME Group rivals Nasdaq OMX Group Inc. and Intercontinental Exchange Inc. Donohue said in a telephone interview today that his company’s focus on derivatives has paid off as competitors try to emulate it.
While a merged Deutsche Boerse and NYSE Euronext would list equities with about $15 trillion in value, more than any other exchange, what may prove more lucrative is ownership of growing venues for trading futures and options, Rich Repetto, a New York-based analyst at Sandler O’Neill & Partners LP, said earlier this month. Chicago-based CME Group is the world’s largest futures exchange, controlling 98 percent of U.S. trading.
“During the course of the last decade a lot of exchanges were moving in the multi-asset-class direction, meaning equities, equity options and futures, and we sort of eschewed that in favor of focusing on our core strengths,” Donohue said.
“We like our strategy,” he said. “We have an amazing global platform that spans all of the major asset classes, which are represented by futures and OTC in our case.”
Donohue declined to comment on any plans by CME Group to make a bid for either company in the Deutsche Boerse-NYSE Euronext deal.
“We’ve consistently said that we’d like to stay within areas where we’re the market leader,” Donohue said. “We’ve been the innovator in derivatives, we’ve been the leading platform, we’ve been the leading clearinghouse.”